# Cae (CAE.TO)

Canonical: https://gigainvestors.com/s/CAE.TO

Analysis as of: 2026-10-16T07:36:27.213Z. Financial observations: FY1997–FY2026.

Listing currency: CAD. Reporting currency: CAD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CAD 33.93 per share; close as of 2026-10-15.

Estimated value: low CAD 7.01 per share, central CAD 7.77 per share, high CAD 8.79 per share. Buy at or below the central value CAD 7.77 per share. Valuation as of 2026-10-16T07:36:27.213Z; scenarios are not confidence intervals.

Expected annual return: 4.3% at the stated quote. About 4.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CA 10-year bond 3.8% + 4 points).

## Checklist

### understandable: fail

- 1 revenue decline in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 2

- Operating margin variation: 0.61×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.13×

- FY2018: 0.16×

- FY2019: 0.15×

- FY2020: 0.15×

- FY2021: 0.02×

- FY2022: 0.08×

- FY2023: 0.12×

- FY2024: -0.04×

- FY2025: 0.15×

- FY2026: 0.13×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 9.7%

- ROIC, second-lowest year: 1.1%

- Typical minus recent gross margin: 0.7 pp

- Typical gross margin (annual median): 28.0%

- Recent gross margin (lower of latest and 3-year median): 27.3%

- Years with nonpositive capital: 0

- Capital spending / revenue: 9.8%

- ROIC including acquisitions, ten-year median: 3.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 14.5%

- FY2018: 18.3%

- FY2019: 12.2%

- FY2020: 11.2%

- FY2021: 1.1%

- FY2022: 6.5%

- FY2023: 7.2%

- FY2024: -2.8%

- FY2025: 10.5%

- FY2026: 9.0%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.46×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CAD 360M

- Net income, five-year total: CAD 779M

- Return on incremental invested capital: 43.4%

- Working capital / revenue, annual change: -1.1 pp

- Working capital / revenue, change between three-year averages: -8.8 pp

- Working capital / revenue, final three-year average: 24.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2022: 0.44×

- FY2023: 0.59×

- FY2024: 1.36×

- FY2025: 0.61×

- FY2026: 1.06×

### management: fail

- Historical market-dollar context (not the management verdict): 2017 to 2026 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 14.5% vs 9.0%

- Per-share earnings: 0.93 to 0.97 (three-year endpoint medians)

- acquired goodwill and intangibles (proxy) exceeds half of ten-year net income with low and deteriorating ROIC

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.8%

- Ordinary dilution, 5-year annual growth: -0.3%

- Market cap gain: CAD 6.2B

- Cumulative retained earnings: CAD 1.3B

- Diluted shares, 10-year annual growth: 1.8%

- Diluted shares, 5-year annual growth: -0.3%

- $1 test, starting fiscal year: FY2017

- $1 test, ending fiscal year: FY2026

- Per-share value growth: 0.5%

- Per-share value change: CAD 0.04

- Per-share value, starting three-year median: CAD 0.93

- Per-share value, ending three-year median: CAD 0.97

- Buybacks concentrated in cheaper years (correlation): 0.60

- Average buyback yield: 0.7%

- Buyback history: 6 years

- Debt-funded buybacks: No

- Acquisition spending: CAD 3.7B

- Cumulative net income, 10 years: CAD 2.0B

- ROIC, first three-year median: 14.5%

- ROIC, last three-year median: 9.0%

Chart: Earnings per share; fiscal year observations.

- FY2017: CAD 0.93

- FY2018: CAD 1.29

- FY2019: CAD 1.25

- FY2020: CAD 1.15

- FY2021: CAD -0.14

- FY2022: CAD 0.45

- FY2023: CAD 0.70

- FY2024: CAD -0.95

- FY2025: CAD 1.26

- FY2026: CAD 0.97

### accounting: pass

- Sloan accruals: -5.0%

- Receivables to sales index (DSRI): 0.97×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 4.2%

- Earnings backed by cash: Yes

- Operating cash / earnings: 2.78×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.70×

Chart: Sloan accruals; fiscal year observations.

- FY2017: -4.0%

- FY2018: -1.0%

- FY2019: -2.8%

- FY2020: -2.8%

- FY2021: -4.7%

- FY2022: -2.9%

- FY2023: -1.8%

- FY2024: -8.9%

- FY2025: -4.4%

- FY2026: -5.0%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 22% since Jan 2026 · "CAE Job Cuts And Defense Pivot Raise Questions On Valuation Gap" (finance.yahoo.com, Apr 2026) · sales +4.4%

Story as of 2026-10-16T10:00:07.500Z; price observation 2026-10-15.

Price needs cash profits to grow 21.9% a year for ten years

- 2025-12-12: CAE awarded contract to deliver Australia's Future Air Mission Training System ([finance.yahoo.com](https://finance.yahoo.com/news/cae-awarded-contract-deliver-australias-012500684.html))

- 2026-04-10: CAE Job Cuts And Defense Pivot Raise Questions On Valuation Gap ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/cae-job-cuts-defense-pivot-221150228.html))

### Sales · FY2025–2026

sales +4.4%; source https://www.sec.gov/Archives/edgar/data/1173382/000117338226000026/cae-20260331.htm; observed 2026-06-22.

- FY2017: CAD 2.7B 

- FY2018: CAD 2.8B 

- FY2019: CAD 3.3B 

- FY2020: CAD 3.6B 

- FY2021: CAD 3.0B 

- FY2022: CAD 3.4B 

- FY2023: CAD 4.0B 

- FY2024: CAD 4.3B 

- FY2025: CAD 4.7B 

- FY2026: CAD 4.9B 

### Gross margin · FY2026

gross margin 27.3%; source https://www.sec.gov/Archives/edgar/data/1173382/000117338226000026/cae-20260331.htm; observed 2026-06-22.

- FY2017: 30.0% 

- FY2018: 31.1% 

- FY2019: 28.5% 

- FY2020: 29.9% 

- FY2021: 25.7% 

- FY2022: 28.3% 

- FY2023: 27.0% 

- FY2024: 27.0% 

- FY2025: 27.6% 

- FY2026: 27.3% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in aerospace & defense; annual sales are CAD 4.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1173382/000117338226000026/cae-20260331.htm (filed 2026-06-22); FY2026: revenue 4914000000; grossProfit 1340100000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); CAE.TO: CAE Inc., together with its subsidiaries, provides training, simulation, and critical operation solutions in Canada, the United States, the United Kingdom, Europe, Asia, the Oceania, Africa, and rest of the Americas. The company operates through two segments, Civil Aviation; and Defense and Security. The Civil Aviation segment offers training solutions for flight, cabin, maintenance, ground personnel, and air traffic controllers in commercial, business, and helicopter aviation; a range of flight simulation training devices; and ab initio pilot training and crew sourcing services, as well as airline operations digital solutions for commercial airlines, regional airlines, business aircraft operators, civil helicopter operators, aircraft manufacturers, third-party training centres, flight training organizations, air navigation service providers, maintenance, repair and overhaul organizations and aircraft finance leasing companies. The Defense and Security segment operates as a training and simulation provider that delivers scalable and platform-independent solutions to enable and enhance force readiness and security for defense forces, original equipment manufacturers (OEMs), government agencies, and public safety organizations. The company has a collaboration agreement with WB Electronics for strengthening defense cooperation between Canada and Poland while supporting the growing need for training and mission readiness in the unmanned and autonomous systems sector. CAE Inc. was formerly known as CAE Industries Ltd. and changed its name to CAE Inc. in 1993. CAE Inc. was incorporated in 1947 and is headquartered in Saint-Laurent, Canada.

### Why customers stay

Margins ranged from 27% to 27.6% during 2024–26; it earns 9.7% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2024: grossProfit / revenue = 27%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2025: grossProfit / revenue = 27.6%.

- Source: https://www.sec.gov/Archives/edgar/data/1173382/000117338226000026/cae-20260331.htm (filed 2026-06-22); FY2026: grossProfit / revenue = 27.3%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); 10-year return on capital observations [[2017,0.14505145211378737],[2018,0.1833312903025788],[2019,0.12226047974153302],[2020,0.11151640131312385],[2021,0.011270079877383795],[2022,0.06537252679307502],[2023,0.07155382180188559],[2024,-0.02834204110066179],[2025,0.10466284132786004],[2026,0.08964049209769]]; median 0.09715166671277502. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 4 of 10 years; bought back CAD 7 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2017: growth capex 24100000; upkeep 211900000; owner earnings 251500000. Growth capex / owner earnings = 0.09582504970178926.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2018: growth capex 0; upkeep 188700000; owner earnings 356900000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2019: growth capex 121200000; upkeep 217200000; owner earnings 317440000. Growth capex / owner earnings = 0.38180443548387094.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2020: growth capex 78600000; upkeep 305400000; owner earnings 213840000. Growth capex / owner earnings = 0.3675645342312009.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2021: growth capex 0; upkeep 163600000; owner earnings 39260000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2022: growth capex 52300000; upkeep 310500000; owner earnings 62700000. Growth capex / owner earnings = 0.8341307814992025.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2023: growth capex 83100000; upkeep 342200000; owner earnings 131520000. Growth capex / owner earnings = 0.6318430656934306.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); FY2025: growth capex 29400000; upkeep 414700000; owner earnings 246880000. Growth capex / owner earnings = 0.11908619572261828.

- Source: https://www.sec.gov/Archives/edgar/data/1173382/000117338226000026/cae-20260331.htm (filed 2026-06-22); FY2026: growth capex 0; upkeep 287800000; owner earnings 332960000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); Dividend observations: [[2017,80600000],[2018,89900000],[2019,99900000],[2020,110900000],[2021,0],[2022,0],[2023,0],[2024,0],[2025,0],[2026,0]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1173382/000117338226000026/cae-20260331.htm (filed 2026-06-22); FY2026: cash repurchases 7000000 CAD.

### Are managers owners

Insiders own <0.1% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); CAE.TO SharesStats.PercentInsiders = 0.027 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 21.9% yearly over ten years; actual decline was 1.2%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-06-22); Ten-year compound average after fade. Initial solved rate 0.3055173160850585. Price 33.93; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2016 owner earnings/share 1.164649818980566 → FY2026 1.0336074532981472. Closing-price date 2026-10-15.

## Monthly share-price history (CAD per share)

- 2016-10: CAD 18.84 per share

- 2016-11: CAD 19.81 per share

- 2016-12: CAD 18.78 per share

- 2017-01: CAD 18.48 per share

- 2017-02: CAD 19.95 per share

- 2017-03: CAD 20.32 per share

- 2017-04: CAD 20.85 per share

- 2017-05: CAD 21.82 per share

- 2017-06: CAD 22.36 per share

- 2017-07: CAD 21.13 per share

- 2017-08: CAD 20.61 per share

- 2017-09: CAD 21.83 per share

- 2017-10: CAD 22.86 per share

- 2017-11: CAD 22.78 per share

- 2017-12: CAD 23.35 per share

- 2018-01: CAD 22.70 per share

- 2018-02: CAD 23.66 per share

- 2018-03: CAD 23.98 per share

- 2018-04: CAD 24.27 per share

- 2018-05: CAD 27.31 per share

- 2018-06: CAD 27.31 per share

- 2018-07: CAD 27.10 per share

- 2018-08: CAD 26.05 per share

- 2018-09: CAD 26.22 per share

- 2018-10: CAD 23.22 per share

- 2018-11: CAD 26.98 per share

- 2018-12: CAD 25.09 per share

- 2019-01: CAD 27.92 per share

- 2019-02: CAD 27.75 per share

- 2019-03: CAD 29.61 per share

- 2019-04: CAD 31.16 per share

- 2019-05: CAD 34.47 per share

- 2019-06: CAD 35.21 per share

- 2019-07: CAD 35.59 per share

- 2019-08: CAD 34.85 per share

- 2019-09: CAD 33.66 per share

- 2019-10: CAD 33.03 per share

- 2019-11: CAD 35.69 per share

- 2019-12: CAD 34.38 per share

- 2020-01: CAD 39.25 per share

- 2020-02: CAD 35.91 per share

- 2020-03: CAD 17.79 per share

- 2020-04: CAD 23.00 per share

- 2020-05: CAD 20.66 per share

- 2020-06: CAD 22.02 per share

- 2020-07: CAD 19.99 per share

- 2020-08: CAD 20.68 per share

- 2020-09: CAD 19.48 per share

- 2020-10: CAD 22.77 per share

- 2020-11: CAD 31.42 per share

- 2020-12: CAD 35.27 per share

- 2021-01: CAD 28.89 per share

- 2021-02: CAD 33.68 per share

- 2021-03: CAD 35.81 per share

- 2021-04: CAD 38.50 per share

- 2021-05: CAD 37.20 per share

- 2021-06: CAD 38.18 per share

- 2021-07: CAD 38.07 per share

- 2021-08: CAD 36.43 per share

- 2021-09: CAD 37.84 per share

- 2021-10: CAD 37.53 per share

- 2021-11: CAD 30.70 per share

- 2021-12: CAD 31.91 per share

- 2022-01: CAD 32.10 per share

- 2022-02: CAD 33.91 per share

- 2022-03: CAD 32.54 per share

- 2022-04: CAD 30.55 per share

- 2022-05: CAD 31.59 per share

- 2022-06: CAD 31.72 per share

- 2022-07: CAD 33.88 per share

- 2022-08: CAD 23.98 per share

- 2022-09: CAD 21.19 per share

- 2022-10: CAD 26.00 per share

- 2022-11: CAD 29.09 per share

- 2022-12: CAD 26.19 per share

- 2023-01: CAD 30.05 per share

- 2023-02: CAD 30.77 per share

- 2023-03: CAD 30.56 per share

- 2023-04: CAD 30.49 per share

- 2023-05: CAD 27.76 per share

- 2023-06: CAD 29.65 per share

- 2023-07: CAD 30.13 per share

- 2023-08: CAD 32.59 per share

- 2023-09: CAD 31.71 per share

- 2023-10: CAD 28.96 per share

- 2023-11: CAD 26.98 per share

- 2023-12: CAD 28.60 per share

- 2024-01: CAD 26.92 per share

- 2024-02: CAD 25.34 per share

- 2024-03: CAD 27.97 per share

- 2024-04: CAD 26.56 per share

- 2024-05: CAD 25.59 per share

- 2024-06: CAD 25.41 per share

- 2024-07: CAD 25.12 per share

- 2024-08: CAD 24.11 per share

- 2024-09: CAD 25.39 per share

- 2024-10: CAD 24.50 per share

- 2024-11: CAD 32.91 per share

- 2024-12: CAD 36.50 per share

- 2025-01: CAD 34.27 per share

- 2025-02: CAD 35.11 per share

- 2025-03: CAD 35.38 per share

- 2025-04: CAD 34.49 per share

- 2025-05: CAD 35.33 per share

- 2025-06: CAD 39.91 per share

- 2025-07: CAD 39.51 per share

- 2025-08: CAD 37.03 per share

- 2025-09: CAD 41.21 per share

- 2025-10: CAD 39.38 per share

- 2025-11: CAD 38.23 per share

- 2025-12: CAD 41.74 per share

- 2026-01: CAD 43.64 per share

- 2026-02: CAD 40.45 per share

- 2026-03: CAD 36.22 per share

- 2026-04: CAD 35.50 per share

- 2026-05: CAD 35.69 per share

- 2026-06: CAD 35.51 per share

- 2026-07: CAD 36.16 per share

- 2026-08: CAD 33.53 per share

- 2026-09: CAD 34.23 per share

- 2026-10: CAD 33.37 per share

## Annual estimated value (CAD per share)

- FY2017: low CAD 13.56 per share, central CAD 17.56 per share, high CAD 20.27 per share

- FY2018: low CAD 15.39 per share, central CAD 19.49 per share, high CAD 22.45 per share

- FY2019: low CAD 16.87 per share, central CAD 21.17 per share, high CAD 24.49 per share

- FY2020: low CAD 19.70 per share, central CAD 25.40 per share, high CAD 29.21 per share

- FY2021: low CAD 11.90 per share, central CAD 13.18 per share, high CAD 14.88 per share

- FY2022: low CAD 7.71 per share, central CAD 8.65 per share, high CAD 9.90 per share

- FY2023: low CAD 4.94 per share, central CAD 5.56 per share, high CAD 6.38 per share

- FY2024: low CAD 2.96 per share, central CAD 3.33 per share, high CAD 3.83 per share

- FY2025: low CAD 3.58 per share, central CAD 3.99 per share, high CAD 4.54 per share

- FY2026: low CAD 6.88 per share, central CAD 7.63 per share, high CAD 8.63 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 40-F filing](https://www.sec.gov/Archives/edgar/data/1173382/000117338226000026/cae-20260331.htm); period 2026-03-31, filed 2026-06-22.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.